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What Makes a CFO Great?

Technical skill and running the finance department are secondary to talking to customers and making a difference, senior executives say.
Andrew Sawers, CFO.com | US
May 18, 2012

What qualities typify excellence in a finance chief?

Technical capability? It's "completely irrelevant," Ian Tyler, chief executive officer of Balfour Beatty, told an audience of well-qualified CFOs from England and Wales. "That is a commodity that you can buy. I'm not saying that it's not important in the wider world, but for the purposes of what makes a great CFO, it's irrelevant."

The perennial theme of what makes for greatness in a senior financial executive was featured at a recent one-day conference in London organized by the Institute of Chartered Accountants in England and Wales.

"There's a really big difference between a good CFO and a great CFO," Tyler, the top executive at the infrastructure-services-business giant, said during a panel discussion at the conference.

For Tyler, a great CFO is part of a very small team of people who run the business: "and I mean, really run the business. One of the corporate myths is that CEOs run companies," he said. "They don't. Within any company there is a small group of people who ultimately take the decisions, and to be part of that team is a question of reality, not status. You first and foremost have to be resolving the balances in the business."

Nor, added Tyler, is there any place on that small management team for anyone who comes at things with a single point of view. "Anybody can have a single point of view on something. It's the resolution of those points of view that is key, and a great CFO has the ability to do that," he said. "A great CFO ultimately is first and foremost part of that senior management team - and a very distant second, running the finance function."

Fellow panelist James Cheesewright, CFO of Eurostar, a passenger-train service that runs from London to Brussels, Paris, and other destinations in France, said that great CFOs are those who can make a difference: "It's the value that you add in the discussions that take place around the senior management or board table. That comes through understanding how an organization works, understanding what's important to your colleagues at the senior management level, and then making a difference accordingly."

He added a caution: "If you go to a board meeting and the numbers are slightly off or you can't explain something, a little bit of credibility dies. Get them off by a lot and you just won't be around."

What really matters, though, is "having the experience and the confidence to distill down in simple words how you think you can make a business better or how a company can be made better. Data and analysis really help with that process. If you are able to present that, it's an enormously powerful position."

Asked whether great CFOs are born or made, Tyler thought they were born: "You have to have an instinct that wants to create value." He asked, rhetorically, how much time does the CFO spend in front of customers?

"If you don't have an instinct to go out and talk to your customers, you really don't have a place around that senior management team. You have to have the instinct to want to go and find out where value is created," said Tyler. "And if you don't, you might be a good CFO. But as far as your stakeholders are concerned, you'll never be a great CFO."

Andrew Sawers is editor of CFO European Briefing, a CFO online publication.




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